Any further cuts in interest rates are now dependent on the future direction of the currency.

Despite the lift in the stock market, consumer and business confidence that greeted incoming Prime Minister Tony Abbott's elevation, growth is tipped to remain below trend for at least two years as the strong Australian dollar hurts investment decisions in the non-mining sectors of the economy.

At the same time, analysts are growing increasingly worried record low interest rates may spark a property bubble in some of the major cities - particularly Sydney.

In the minutes for the RBA's September board meeting, when they left official interest rate at a record low 2.5 per cent, the central bank left open the prospect of further rate cuts, albeit only if needed.

The RBA has now clearly moved away from its previous easing bias to a more neutral wait-and-see setting.

"Members agreed the bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them," the RBA minutes said.

"Lending rates have declined to historically low levels, which, together with the lower - though still high - exchange rate, were continuing to provide a substantial degree of policy stimulus to the economy."

The futures market is pricing in only a 60 per cent chance of another rate cut by mid-2014, despite RBA concerns about non-mining investment remaining "subdued" as businesses remain reluctant to take on new risk.

Economists said the recent rise in the Australian dollar back to US93c level ahead of the US Federal Reserve's expected tapering of its $85 billion monthly bond buying programs later this week may however force the RBA back to the rate cutting quicker than it wants.

"The recent lift in the Australian dollar over the past few weeks puts the RBA in a Catch 22 scenario," Bank of Melbourne (or St George Bank for NSW and Queensland) economist Janu Chan said.

"In part, the Aussie has lifted due to rising expectations the RBA is done cutting rates. However, a high Aussie will keep the door open for another rate cut, because a stronger currency tightens financial conditions."

BIS Shrapnell chief economist Frank Gelber expects the currency will trade between US88c and US93c for the next two years, curbing growth in the non-mining sectors of the economy.

In a briefing to clients in Melbourne on Tuesday, Dr Gelber said the economy will remain in a "slow patch" for the next two years as official interest rates stay largely steady before growth really picks-up speed in the second-half of the decade.

"There will be no recession and fears about a property bubble are overblown outside of certain areas but the switch in growth drivers from mining to the non-mining economy will leave gaps in demand over the next two years," he said.

"The next two years will be a difficult time. With continued softness we could lose more struggling companies before non-mining investment comes through. The other major worry is unemployment drifting higher as workers from the mining sector are redeployed across the economy."

The RBA has cut rates eight times since November 2011 to help offset a slowdown in a decade-long mining boom that threatens to drive up unemployment, already near its financial crisis peak of 6.3 per cent.

In a bid to push the currency lower, Westpac chief economist Bill Evans is tipping at least one more 25 basis point cut by the central bank before Christmas, taking official interest rates to a record low of 2.25 per cent.

"The Australian dollar is clearly a source of concern for the RBA," he said.

"There is no doubt that the RBA believes that part of the reason behind the Australian dollar fall between April (US$1.05) and August (US90c) was the rate cuts and its consistent easing bias."

CitiGroup chief economist Paul Brennan however said the longer the RBA waits the less likely it will cut again.

"There will be no further rate cuts in the current cycle and the first rate hike is likely to occur in the third quarter of 2014," he said.

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